Investing.com — The dollar remained broadly lower against other major currencies on Friday, as tensions between the U.S. and North Korea continued to dominate market sentiment and as investors were unwilling to take risks ahead of the weekend.

The dollar had strengthened broadly after the Federal Reserve on Wednesday indicated that one more interest rate hike is likely this year and said it will begin to unwind its $4.5 trillion balance sheet in October.

But market sentiment was hit after North Korean leader Kim Jong Un said on Friday that Pyongyang will consider the «highest level of hard-line countermeasure in history» against the U.S. in response to President Donald Trump’s threat to destroy the country.

Shortly after, North Korea’s Foreign Minister Ri Yong Ho said his country could conduct a hydrogen bomb test in the Pacific Ocean of an unprecedented scale.

In his first speech before the United Nations General Assembly on Tuesday, Trump said «the United States has great strength and patience, but if it is forced to defend itself and its allies, we will have no choice but to totally destroy North Korea.»

The safe-haven yen and Swiss franc remained higher, with USD/JPY sliding 0.52% to 111.87, just off the previous session’s two-month peak of 112.72, while USD/CHF fell 0.25% to trade at 0.9682.

Elsewhere, EUR/USD gained 0.30% to trade at 1.1978, while GBP/USD was down 0.35% at 1.3536, after briefly hitting session lows of 1.3491.

The euro was boosted by data released earlier Friday by research group Markit showing that manufacturing and service sector activity in the euro zone expanded more than expected this month.

Meanwhile, the pound came under pressure during a highly-anticated speech by UK Prime Minister Theresa May on the Brexit process.

Speaking in Florence, Italy, May said the UK “has never totally felt at home in the European Union” but that Brexit “does not mean we are turning our back on Europe” and that she hopes for a “creative and practical” separation.

May continued to say that the EU and the UK have a shared commitment to free trade, adding however that her country’s future partnership with the EU cannot be like the European Economic Area – where goods, services and people move freely – nor can it be solely based on a trade deal, like the one the bloc has with Canada.

The Prime Minister also indicated that Britain would continue to pay into the EU budget until 2020.

The Australian and New Zealand dollars were stronger, with AUD/USD up 0.66% at 0.7983 and with NZD/USD advancing 0.47% to 0.7341.

Meanwhile, USD/CAD slumped 0.38% to 1.2282.

In Canada, data on Friday showed that inflation rose less-than-expected last month by only 0.1%, while core inflation was unchanged.

A separate report showed that retail sales showed a larger-than-expected increase in August, but the core reading was weaker than forecast.

The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was down 0.26% at 91.73 by 10:50 a.m. ET (14:50 GMT), off Thursday’s one-week highs of 92.42.